For highest salary increases in Canada, look to the oilpatch: Mercer survey

CALGARY – For the biggest pay hikes in Canada, look no further than the oilpatch.

The energy sector continues to lead the country in both actual and projected salary increases, according to survey released Monday by global consulting firm Mercer.

The average base salary increase across the country is expected to be three per cent next year, the same as in 2014.

But in the energy sector, the pay bump is forecast at 3.7 per cent in 2015 after an actual 3.9 per cent increase this year.

Mercer has conducted its Canada Compensation Planning Survey for more than two decades, compiling responses from nearly 700 organizations across Canada.

For the past five years, the trends have been stable both at a national level and amongst different industries, Mercer’s Allison Griffiths said in an interview.

“Companies just, in general, are feeling more stable and more confident about their outlooks,” she said.

When the energy sector is removed from the mix, the national average projected salary increase drops to 2.9 per cent. That effect is more pronounced in energy-rich Alberta and Saskatchewan.

On the other end of the spectrum, the transportation, equipment, consumer goods and retail/wholesale industries are expected to see the smallest salary increases at around 2.6 or 2.7 per cent.

“All different factors come into play here when we’re talking about salary increases. It’s the economy… or who are the big companies within the region and what are they doing? Cost of living comes into it, competition for labour,” said Griffiths.

“Retail in general is typically one of the industries that their profits and their margins are very tight, so they’re typically very conservative with their salary increases.”

While base salary is an important component in attracting and retaining talent, it’s important to make sure employees understand in other ways that they’re valued, she said.

“Unless you have good communication and you’re really able to explain things to employees in a meaningful way, things get lost in translation and the engagement aspect of it can get diminished,” she said.

“It’s actually about how it’s delivered and thanking your employees for their hard work and things like that.”

Another important aspect is making sure employees are aware of opportunities for advancement within their organization. With the economic outlook stabilizing, companies are becoming more focused on putting so-called “career frameworks” in place.

Demographics also has a lot to do with it, said Griffiths.

“The younger generation definitely wants to know more and wants more transparency around their career potential.”